The Backstage of Your Business Model Canvas (1/2)

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Have you ever caught yourself wondering while watching live performance in a theater, what the backstage area was like?

 If you answered yes, then we have something in common!

backstage
Alex Osterwalder 2010

Just like a live performance theater, the Business Model Canvas (BMC) also has a backstage if you just go behind the curtains. The backstage on the BMC is located on the left side of the Value Proposition box. The purpose of the backstage keeps the show going on that is taking place on the front stage.

The backstage is where the company drives cost. The common goal amongst all companies is to be able to have a profit. Profit is when your company’s revenues need to be at least or much greater than costs.

My previous blogs discussed the front stage of the BMC. The front stage is where the business has the opportunity to interact as much as possible with customers, clients, and users. Most of the time, customers or the audience will not be able to see what is actually going on in the back stage.

 

The backstage of the BMC covers 4 topics (We will discuss the first two in this post):

  1. Key Activities is where your company describes the most important tasks your company must undertake to support the business model.
  2. Key Resources describes the most important assets
  3. Key Partners describes the built network of suppliers and partners that impact the company’s business model.
  4. Cost Structure defines any cost that your business will incur to operate the business model.

 

KEY ACTIVITIES

What do you need to do to make the business work and what Key Activities do you need to become an expert at?

 

So take a second and ask yourself if you have not already about the TYPE of business model you have.

Is it problem solving?

Is it production?

Is it supply chain?

 

Most businesses including the one you want to start will have many different key activities at any given time. Key activities will need to be implemented to successfully build and operated your company successfully. Like most of the different areas of the BMC, key activities need to support your co

Most businesses including the one you want to start will have many different key activities at any given time. Key Activities will need to be implemented to successfully build and operated your company successfully. Like most of the different areas of the BMC, key activities need to support your company’s Value Proposition. In addition, Key Activities will support your company in a way to reaching its markets, maintain customer relationships, and most importantly earn revenue for the business.

Key Activities will be different depending on the type of business model. They will also be different if you are starting a new business and be dependent on where the company is at in the process.

key activities
Alex Osterwalder 2010

So ask yourself what Key Activities does you’re:

  • Value Proposition requires?
  • Distribution Channels?
  • Customer Relationships?

Your Key Activities can be categorized by:

  • Production
  • Problem Solving
  • Platform or Network

For example, if you are in the early stages of the startup process, Key Activities might be to do some research and apply for business license and permits. The Key Activities will change all the time and that tends to be a positive thing because it means are you getting tasks completed. Remember to keep your Key Activities simple with achievable goals.

This is the section of the BMC that focuses on the critical things your business will need to support the idea of delivering its Value Proposition and keep the company operating successfully. Depending on what type of business, your company’s key resources will vary. They will also vary during the early part of the startup process.  Key Resources might be physical, intellectual, human, or financial. They are also leased or owned by the business and may be attained from Key Partners.

key act
Steve Blank 2011

 

KEY RESOURCES

What are your Key Resources or what do you need to keep your business evolving?

key resources
Alex Osterwalder 2010

 

I am confident in saying that it is very difficult to start a business without applying Key

I am confident in saying that it is very difficult to start a business without applying Key Resources and should be included in EVERY business model. Similar to the Key Activities, Key Resources allow a company to provide their Value Proposition, reach different markets, and build healthy relationships with Customer Segments.

Examples of Key Resources:

  • Physical
    • Equipment
    • Manufacturing
    • Building
    • Machines
    • Vehicles
  • Finance
    • Private loans
    • Taking a Line of Credit from a bank
    • Crowdfunding
    • Raising money
  • Human
    • Having people who care work for your company.
    • Software Engineers
    • Designers
    • Manufacturers
  • Intellectual
    • Patents
    • License
    • Customer lists

 

 

The following video is a brief description of your Key Resources.

 

Steve Blank 2011

For more on Key Resources check out the previous blog post I wrote!

Stranded on a Deserted Island Searching for Key Resources

 

 Please leave a comment on my page or reach me on my Twitter!

 

Please Tweet at me @ACT_in_Mind using #LearnbyDoing

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Downloadable material: CLICK HERE

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